Friday, August 08, 2003

Creighton Watch: USA Today Asks No Questions

USA Today offers its usual non-critical reporting, this time in a profile of new FTC antitrust chief Susan Creighton:

Mergers that need reviewing have fallen 75% since 2000 because of the sluggish economy and a policy change that raised the value of mergers that must be reported to the government. But that means the 250-lawyer staff that Creighton heads can focus on anti-competitive behavior that costs consumers money.

Since the start of the Bush administration, the FTC has opened more than 100 investigations and taken enforcement action in 25, a 30% jump over any two-year period since the mid-1980s.

While some expect a lighter touch with business from Republicans, Bush-appointed FTC Chairman Tim Muris and former antitrust chief Joseph Simons brought a series of cases against brand-name and generic drug firms whose deals were believed to be keeping low-cost drugs off store shelves. Creighton, a Republican who was Simons' deputy for two years, is said to have been a driving force behind the cases.

Those who know Creighton have only high praise. "She's very, very bright with an intellectual quietness," says William Baer, who had Creighton's job for much of the Clinton administration. Adds former FTC mergers chief George Cary: "She's extremely bright, very thoughtful and understands the legitimate purpose of antitrust enforcement without being at all reflexive."

Not a single critical word of Creighton—or the FTC—is spoken in the article. I'm particularly amused at the article's conclusion that the lack of mergers leaves the Bureau's 250 lawyers with more time to "focus on anti-competitive behavior." A more interested journalist's eye would probably view the expansion of non-merger enforcement as a sign that 250 lawyers are looking for something to do lest Congress figure out they can spend less money on antitrust activities.

And while the article quotes a former FTC official as saying Creighton "understands the legitimate purpose of antitrust enforcement," USA Today never thought to share with its readers what that purpose is. Talk to the several thousand physicians that the Muris FTC has prosecuted in the past two years and see if they think Creighton & Company aren't being "reflexive" or anti-consumer in their thinking.

Even when discussing Creighton's record, USA Today never thinks to look at the other side of the discussion:

Creighton is widely considered to be the behind-the-scenes brains that launched the Justice Department probe-turned-lawsuit against Microsoft. Her law partner in a Silicon Valley law firm, Gary Reback, was the public pitchman for their client, Netscape. But it was Creighton who wrote the report laying out the complaints about Microsoft's tactics that helped antitrust enforcers make their case.

Creighton is a loyal member of the government team now but once fought the FTC in court. Creighton represented VISX, maker of laser-eye-surgery equipment, against charges that it broke antitrust laws when it formed a joint venture with Summit Technology, the only other laser maker, and fraudulently obtained the patent. Creighton successfully defended VISX against some of the FTC charges. She also helped negotiate a settlement of the rest of the case.

Creighton says that even though she was working against the government, the VISX position was defensible for consumers because if the companies had not teamed up, there's a good chance neither would have entered the market, leaving consumers without any source for the surgery.

One of Creighton's major projects now is an ongoing review of some hospital mergers approved during the Clinton administration. People familiar with the agency's work say the FTC is expected to challenge some of those mergers because they ultimately led to higher prices for health care.

It's interesting that a nominally "pro-business" Bush administration would have the leader of the Microsoft antitrust mugging running its antitrust shop. Then again, Creighton's an FTC bureaucrat, and since the Commission is an "independent agency," the White House gets no formal imput on these types of appointments. The White House does, however, appoint the FTC commissioners who supervise Creighton, and when President Bush made his first FTC appointment last month, he picked a career antitrust lawyer with no outside business experience. Antitrust thus remains a governmental function without any accountability mechanism—just antitrust lawyers "supervising" other antitrust lawyers.

Finally, consider Creighton's agenda on issues like hospitals. Since taking over, the Muris FTC has made it abundantly clear that no merger is safe—even those that the FTC previously approved or that are outside the Commission's normal jurisdiction. This is nothing but a naked power grab, one that abandons the traditional American view of the law as objective. A business's actions can be deemed illegal by the FTC even if the FTC itself previously found it legal. Tyranny doesn't get much more obvious than that.